TORCH OFFSHORE, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of July
30, 2002 (the "Effective Date"), and is entered into between Torch Offshore,
Inc., a Delaware corporation (the "Corporation"), and Xxxxxx X. Xxxxxx, a person
of the full age of majority (the "Employee").
1. Employment and Duties.
(a) The Corporation agrees to employ the Employee as Chief
Financial Officer, or a similar capacity, as of the Effective Date for the
period set forth in paragraph 1(c) below, unless employment is terminated sooner
as provided herein.
(b) The Employee accepts employment and agrees to devote his full
time and attention to the performance of his duties as determined, from time to
time, by the Chief Executive Officer or the Board of Directors of the
Corporation.
(c) The Employee shall commence his duties as of July 30, 2002
and, except as provided herein, shall continue to serve in the employ of the
Corporation until July 30, 2004 (the "Initial Term"). This Agreement shall be
automatically renewed for successive one-year terms unless terminated at least
thirty (30) days prior to the end of the then current year term (each successive
year is the "Renewal Term").
2. Compensation. For all services rendered by the Employee, the
Corporation shall compensate the Employee as follows:
(a) Annual Salary. The Corporation shall pay to the Employee,
subject to the terms and conditions set forth in this Agreement, an annual
salary of $165,000, and such amount shall be prorated and paid in accordance
with the Corporation's customary payroll practices.
(b) Perquisites and Benefits. The Employee shall be eligible to
receive awards under the Corporation's 2001 Long-Term Incentive Plan and
entitled to receive in the aggregate substantially the same fringe benefits and
perquisites offered by the Corporation to any of the Corporation's similarly
situated employees, including, without limitation, participation in the various
employee benefit plans or programs provided to the employees of the Corporation
in general, subject to the regular eligibility requirements with respect to each
of such benefit plans or programs.
(c) Additional Benefits. The Employee shall be paid a one-time
lump sum of $10,000 with $5,000 paid with first payroll check and $5,000 paid
after six months of employment. The Employee shall be entitled to fifteen (15)
business days of paid vacation each year, to be accrued and taken in accordance
with the Corporation's standard policies and practices.
(d) Severance. If the Corporation terminates the employment of the
Employee for any reason other than Cause (as defined in paragraph 4(d)), then
the Corporation shall pay to the
Employee severance payments of twelve (12) months of salary at his then current
rate, to be paid in accordance with the Corporation's standard payroll
practices, subject to Employee's execution of a general release as provided in
paragraph 12 of the Agreement. The Employee expressly acknowledges and agrees
that the Employee shall not be eligible to receive from the Corporation any form
of severance pay or other form of termination benefit, except as expressly
provided in this paragraph 2(d) (other than coverage under COBRA or other form
of legally mandated benefit available after the termination of employment).
Any amount(s) payable under this Agreement shall be subject to
the withholding of such income and employment taxes as may be required by law to
be withheld.
3. Payment or Reimbursement of Expenses. Subject to compliance by
the Employee with such policies regarding expenses and expense reimbursements as
may be adopted, from time to time, by the Corporation, the Employee shall be
paid or reimbursed for reasonable expenses actually incurred in connection with
the performance of his duties hereunder and in the furtherance of the business
and affairs of the Corporation. Any such reimbursement shall be made within a
reasonable period after presentation by the Employee of an itemized account of
such expenses, accompanied by appropriate receipts satisfactory to the
Corporation. In no event shall any expense be paid or reimbursed, unless
properly accounted for to the extent necessary to substantiate the Corporation's
Federal income tax deduction under the applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated
thereunder or any similar state or federal law or regulation.
In addition, the Corporation shall provide for the payment or reimbursement of
certain expenses related to the Employee's acceptance of employment and
relocation to the New Orleans, Louisiana are upon such terms and conditions as
provided in Schedule B, attached hereto and incorporated herein by reference. As
provided in Schedule B and in accordance with those terms and conditions, such
payment or reimbursement by the Corporation includes a relocation allowance, a
living allowance, and certain costs related to the purchase of a primary
residence in the New Orleans, Louisiana area, the sale of the Employee's primary
residence, and the shipment and storage of household effects.
The Employee shall receive an allowance of $450.00 per month for use of an
automobile for business purposes and shall be reimbursed for business mileage
(non-commuting) at $0.11 per mile.
4. Termination.
(a) This Agreement and the Corporation's obligations hereunder
shall terminate as of the conclusion of the Initial Term, unless terminated
earlier pursuant to this paragraph 4 or extended for successive one-year terms
as provided in paragraph 1(c) hereof.
(b) Either party may terminate this Agreement by providing the
other party with thirty (30) days written notice.
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(c) If the Employee dies or becomes totally disabled (as
determined by the Board of Directors or the Chief Executive Officer of the
Corporation), this Agreement and the Employee's rights hereunder shall
automatically terminate as of the date of such death or disability.
(d) The Corporation may terminate this Agreement and the
Employee's rights hereunder at any time for Cause, which shall mean only (i) if
termination shall have been the result of an act or acts of dishonesty on your
part constituting a felony and resulting, or intending to result, directly or
indirectly, in gain or personal enrichment at the expense of the Corporation or
(ii) upon the willful and continued failure by you to substantially perform your
duties with the Corporation (other than any such failure resulting from your
incapacity due to mental or physical illness) after a demand in writing for
substantial performance is delivered to you by the Board of Directors of the
Corporation, which demand specifically identifies the manner in which the Board
of Directors of the Corporation believes that you have not substantially
performed your duties, and such failure to perform your duties results in
demonstrably material injury to the Corporation. Your employment shall in no
event be considered to have been terminated by the Corporation for Cause if such
termination took place as the result of (a) bad judgment or negligence on your
part, or (b) any act or omission without intent of gaining therefrom, directly
or indirectly, a profit to which you were not legally entitled, or (c) any act
or omission believed by you in good faith to have been in or not opposed to the
interest of the Corporation, or (d) any act or omission in respect of which a
determination is made that you met the applicable standard of conduct prescribed
for indemnification or reimbursement or payment of expenses under the by-laws of
the Corporation or the laws of the State of Louisiana or the directors and
officers liability insurance of the Corporation, in each case in effect at the
time of such act or omission. You shall not be deemed to have terminated for
Cause unless and until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board of Directors of the Corporation at a
meeting called and held for the purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before the Board of
Directors of the Corporation), finding that in the good faith opinion of the
Board of Directors of the Corporation you were guilty of conduct set forth above
in clauses (i) or (ii) of the first sentence of this definition and specifying
the particulars thereof in detail.
5. Covenant Not to Compete. During the term of the Employee's
employment with the Corporation or for a period of twelve (12) months following
any termination of the Employee's employment by the Corporation, the Employee
agrees that, with respect to the parishes within the State of Louisiana and the
counties within the States of Texas, Alabama, Florida, and Mississippi set forth
on Schedule A attached hereto, including the territorial waters of the United
States located offshore of such areas, each of which the Employee stipulates and
agrees that the Corporation carries on or intends to carry on a like business,
the Employee shall not, directly or indirectly, for his own benefit or to the
detriment of the Corporation or its affiliates:
(a) Own, manage, operate, control, or participate in the
ownership, management, operation, or control of a business (however structured)
that carries on or engages in any manner (excluding stock in a publicly held
corporation), in the Pipelay and Subsea Construction Business. For this purpose,
the term "Pipelay and Subsea Construction Business" shall refer to
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the installation, laying, and/or burying of transmission lines, trunk lines, and
flowlines, laying of all rigid, flexible, reeled, or coiled tubing and
installing, laying, and/or burying of control, power umbilicals and subsea
communication or power cables, and pipeline tie-ins, pipeline burial, riser
installation and survey, inspection, maintenance, and repair services in
connection with oil and gas pipelines;
(b) Perform any services similar to the primary services he
performed while employed by the Corporation or any of its subsidiaries or
affiliates for any person, partnership, corporation, association, group, or
other entity engaged in the Pipelay and Subsea Construction Business (as defined
above), whether as an employee, independent contractor, or otherwise; or
(c) Solicit customers or employees of the Corporation or any of
its subsidiaries or affiliates for any purpose or in any manner detrimental to
the Corporation or it business or operations.
The parties hereto agree that each of the foregoing
prohibitions is intended to constitute a separate restriction. Accordingly,
should any such prohibition be declared invalid or unenforceable, such
prohibition shall be deemed severable from and shall not affect the remainder
thereof. The parties further agree that the foregoing restrictions are
reasonable in both time and scope.
Because of the difficulty of measuring economic loss to the
Corporation as a result of a breach of any of the foregoing prohibitions, and
because of the immediate and irreparable damage that could be caused to the
Corporation for which it would have no other adequate remedy, the Employee
agrees that the foregoing prohibitions may be enforced by the Corporation, in
the event of breach by him, by injunctions, restraining orders, and orders of
specific performance issued by a court of competent jurisdiction. The Employee
further agrees to waive any requirement for the Corporation's securing or
posting of any bond in connection with such remedies.
6. Confidential Information.
(a) The Employee agrees not to disclose, either while employed by
the Corporation or any of its subsidiaries or affiliates or at any time
thereafter, to any person not employed by the Corporation or not engaged by the
Corporation to render services to the Corporation, any confidential information
of the Corporation or its subsidiaries or affiliates learned by the Employee
during the course of his employment by the Corporation. This paragraph 6 shall
not preclude the Employee from the use or disclosure of information known
generally to the public or of information not considered confidential by persons
engaged in the business conducted by the Corporation or from disclosure required
by law or court order. The Employee further agrees that, upon the expiration or
termination of this Agreement for any reason, he will not take with him, without
the prior written consent of the Corporation, any document, magnetic or other
storage media, or any other books, records, files, or confidential or
proprietary information of the Corporation or any of its subsidiaries or
affiliates.
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(b) All written materials, records, and documents made by the
Employee or in the possession of the Employee during or after the term of this
Agreement concerning the business or affairs of the Corporation or any of its
subsidiaries or affiliates, or other items or property held by or for the
Employee, but owned or used by the Corporation or its subsidiaries or
affiliates, shall be the sole property of the Corporation or such subsidiary or
affiliate, as the case may be, and, upon the expiration or termination of the
term of this Agreement or upon the request of the Corporation or such subsidiary
or affiliate, the Employee shall promptly deliver all of such materials,
records, documents, or other items or property that are then in his possession.
7. Notices. All notices, requests, demands, and other
communications provided for by this Agreement shall be in writing and shall be
deemed to have been duly given when delivered in person or mailed by United
States certified mail, return receipt required, postage prepaid, addressed as
follows:
If to the Employee: If to the Corporation:
Xxxxxx X. Xxxxxx Torch Offshore, Inc.
0000 Xxxx Xxxxx Xxxxx 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000 Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx, CEO
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. Governing Law. The provisions of this Agreement shall be
construed in accordance with the substantive local law of the State of
Louisiana, without consideration of the conflicts of law provisions thereof.
9. Successors. This Agreement shall be assignable by the
Corporation, with the prior written consent of the Employee. The Employee's
obligation to provide services hereunder, being personal to the Employee, may
not be assigned by the Employee.
10. Remedies. Each party acknowledges that the other party will
have no adequate remedy at law if the first party violates certain of the terms
of this Agreement, including but not limited to paragraphs 5 and 6, and that the
other party shall have the right, to the extent permitted by applicable law, in
addition to any other rights or remedies it may have, to obtain from any court
of competent jurisdiction, injunctive relief to restrain any breach or
threatened breach hereof or otherwise to specifically enforce the provisions
hereof.
11. Waiver. No waiver of any obligation, right, or remedy under
this Agreement shall be effective, unless such waiver is made in writing,
specifying the terms of this Agreement subject to waiver and executed by the
party to be charged with such waiver. A waiver by either party of any of his or
its rights or remedies hereunder on any occasion shall not be a bar to the
exercise of the same right or remedy on any subsequent occasion or of the
exercise of any other right or remedy at any time.
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12. Release. Notwithstanding anything in this Agreement to the
contrary, the Employee shall not be entitled to receive any severance payment
pursuant to paragraph 2(c) of this Agreement unless the Employee has executed
(and not revoked) a general release of all claims the Employee may have against
the Corporation and/or its subsidiaries and affiliates with respect to
employment under this Agreement, in a form of such release reasonably acceptable
to the Corporation.
13. Integration and Amendments. This Agreement constitutes the
entire agreement and understanding between the parties with respect to the
subject matter hereof and supersedes any prior agreement or understanding,
whether written or oral, relating to such subject matter. No modification or
amendment to this Agreement shall be effective or binding unless in writing,
specifying such modification or amendment, executed by both of the parties
hereto.
14. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the construction or interpretation
of this Agreement.
15. Severability. Should any section, provision, or portion of
this Agreement be declared invalid or unenforceable in any jurisdiction, then
such section, provision, or portion shall be deemed to be (a) severable from
this Agreement as to such jurisdiction (but not elsewhere) and shall not affect
the remainder hereof and (b) amended to the extent, and only to the extent,
necessary to permit such section, provision, or portion, as the case may be, to
be valid and enforceable in such jurisdiction (but not elsewhere).
16. Survival of Certain Provisions. The rights and obligations of
the Employee under paragraphs 5 and 6 hereof shall survive the expiration or
termination of this Agreement.
17. Dispute Resolutions. Except with respect to injunctive relief
as provided in paragraphs 5, 6 and 10, neither party shall institute a
proceeding in any court or administrative agency to resolve a dispute between
the parties before that party has sought to resolve the dispute through direct
negotiation with the other party. If the dispute is not resolved within two
weeks after a demand for direct negotiation, the parties shall attempt to
resolve the dispute through mediation. If the parties do not promptly agree on a
mediator, the parties shall request the Louisiana State Bar Association to
appoint a mediator in the state of Louisiana who is qualified as a mediator
under the Louisiana Mediation Act, as amended from time to time. If the mediator
is unable to facilitate a settlement of the dispute within a reasonable period
of time, as determined by the mediator, the mediator shall issue a written
statement to the parties to that effect and any unresolved dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration, conducted before a panel of three arbitrators in
Gretna, Louisiana in accordance with the employment dispute resolution
arbitration rules of the American Arbitration Association then in effect. The
arbitrators shall have the authority to order back-pay, severance compensation,
vesting of options (or cash compensation in lieu of vesting of options),
reimbursement of costs and expenses, including those incurred to enforce this
Agreement, including reasonable attorneys' fees, and interest thereon. A
decision by a majority of the arbitration panel shall be final and binding.
Judgment may be entered on the arbitrators' award in any court having
jurisdiction.
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THIS AGREEMENT was executed in multiple counterparts, each of which
shall be deemed an original, as of the dates set forth below, but to be
effective as of the Effective Date.
EMPLOYEE: TORCH OFFSHORE, INC.
____________________________ By:_______________________________________
Xxxxxx X. Xxxxxx
Title:____________________________________
Date:_______________________ Date:_____________________________________
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Schedule A - Counties and Parishes in which Competition is Prohibited
I. TEXAS
Xxxxxxxxx Xxxxxxxx Xxxxxx
Galveston Brazoria
Xxxxxxx Aransas
Nueces Xxxxxxx
XX. LOUISIANA
Cameron Vermilion Lafayette
Iberia St. Xxxx Orleans
Terrebonne Lafourche
Jefferson Plaquemines
III. MISSISSIPPI
Xxxxxxx Xxxxxxxx
Xxxxxxx
XX. ALABAMA
Mobile
V. FLORIDA
Escambia Santa Xxxx
Pinnellas Hillsborough
Manatee Brevard
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Schedule B - Definition of Certain Payment or Reimbursement of Expenses
RELOCATION ALLOWANCE:
You will be paid a miscellaneous Relocation Allowance of one month's base pay
effective on the date your family relocates to the New Orleans area.
LIVING ALLOWANCE:
You will be eligible to receive a monthly miscellaneous Living Allowance of
$1,500 per month for six (6) months starting on your date of hire.
You will not be eligible to claim reimbursement via Expense Report for personal
expenses associated with temporary accommodations (housing/apartment/hotel),
meals, commuting mileage, a vehicle, laundry, personal long distance call, or
other such incidental expenses.
The Living Allowance may not be substituted for other benefits in-kind nor will
it be allowed to be extended beyond six (6) months. To receive payment of the
Living Allowance, the enclosed sample memorandum should be completed, signed,
approved and forwarded to the Human Resources Manager, as indicated. Requests
for payment of these amounts in advance will not be considered.
PURCHASE OF PRIMARY RESIDENCE IN THE NEW ORLEANS OR SURROUNDING AREA:
The Company will pay closing costs (see attached list) if you purchase your
primary home in the New Orleans area (does not include discount points). This
benefit will remain valid for up to one (1) year from your date of hire. The
value of this benefit may not be substituted for other benefits in-kind. For
reimbursement of realtor fees/commissions and approved closing costs, expenses
should be submitted via Expense Report (see enclosed sample). Requests for
payments of these amounts in advance will not be considered.
SALE OF PRIMARY RESIDENCE:
OPTION 1:
The Company will reimburse up to 6% of the sale price of your primary permanent
residence/home (owned solely by you; excludes vacation home) in Realtor
fees/commission plus closing costs (see attached list) associated with the sale
of this home. The benefit will remain valid for up to a maximum of one (1) year
form the date your family relocates to the New Orleans area. The value of this
benefit may not be substituted for other benefits in-kind.
OPTION II:
You will have the option to utilize the services of a professional relocation
company to assist you in the sale of your primary residence. If you choose this
option, representatives from the
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relocation company will be providing you with detailed information regarding the
benefits associated with utilizing their services.
SHIPMENT OF HOUSEHOLD EFFECTS:
The Company has contracted the services of a professional moving company who
will arrange for and the Company will pay the actual costs of shipping your
personal and household belongings to the New Orleans area, and provide insurance
on same at reasonable replacement value (insurance coverage excludes heirlooms,
jewelry, plants, and those items not eligible to be transported as indicated in
the next paragraph) up to a maximum replacement value of $80,000. In the event
of an insurance claim, you will be required to substantiate the value of any
lost or damaged items.
The shipment and insurance coverage will be based on a "door-to-door" basis and
will include packing, unpacking and debris removal. It will cover normal
connecting and disconnecting of appliances at origin and destination done by the
mover. The value of shipping and insuring your belongings may not be substituted
for cash or other benefits in-kind.
The Company will not cover additional expenses for Saturday or Sunday pickup or
delivery, or be responsible for the packing or transportation of any of the
following: automobiles, boats, travel trailers, motorhomes, motorcycles,
tractors, aircraft, firearms, building materials, firewood, flammable or
explosive items (i.e. paints, gasoline, household cleaners, gas containers,
liquor, ammunition), items that are alive (i.e. tropical fish, pets or
livestock) refrigerated or frozen items, medicine, or those items having
peculiar inherent value (i.e. heirlooms, jewelry, furs, money, coin and/or stamp
collections and negotiable items of all kinds). Pickup of household goods will
be made from one (1) location only; likewise for delivery. Also, the Company
will not cover removal or installation of computers, a television antenna,
removal or installation of satellite dishes, extra labor for cleaning out a
garage or attic, tips and/or meals to the moving crew, special wiring, venting
or other unusual services in connection with the installation of appliances,
window a/c units, or dismantling of aboveground swimming pools, metal or wood
storage buildings, hot tubs, treehouses, trampolines, swing/gym sets.
HOUSEHOLD GOODS STORAGE:
The Company will pay the charges for up to thirty (30) days with prior Company
approval. Storage beyond 30 days will be at your expense. It is important to
remember that storage charges accrue daily, so please coordinate your move with
consideration of the availability of housing.
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